The tradeoff between ecological protection and economic growth in China's county development: Evidence from the soil and water conservation projects during 2011-2015

Based on a new database including the soil and water conservation (SWC) projects implemented in 296 counties of China during its 12th 5-Year Plan (2011-2015), this paper investigates how China's county governments balance the nexus of ecological protection and economic growth by examining the relationship between the SWC effect and local economic condition. The result shows that local economic structure has a significant impact on the SWC effect. When all the other predictors are held constant, if the proportion of agricultural sector in local GDP increases by 1%, the soil erosion (SE) control degree increases by 0.18-0.40%; if the proportion of industrial sector increases by 1%, the SE control degree decreases by 0.18-0.37%; and if the proportion of service sector increases by 1%, the SE control degree decreases by 0.28-0.40%. This paper argues the reason is that when facing fiscal pressure, county governments are less incentivized to implement SWC for agricultural development and focus more on the development of the industrial and service sectors. The pursuit of economic growth has actually resulted in an extrusion effect for the SWC. Therefore, to improve the SWC effect, it is optimal to enhance the economic benefits and efficiency of agriculture to promote a virtuous circle between SWC and agricultural development. Moreover, more investment in agriculture-dominated economies and in more densely populated areas, as well as control at early stage when the SE area is still small, are found to be effective in improving the efficacy of the SWC measures.